A woman was arrested in Slovenia for fraud after cutting her hand off with a circular saw in a bid to land an insurance payout, police say.

Her hand was later sewn back on at Ljubljana University Medical Centre.

She was hoping to get around €380,000 in compensation after signing up for five insurance policies shortly before the incident, officers alleged.

"With one of her accomplices, she intentionally amputated her hand at the wrist with a circular saw, hoping to stage it as an accident," police spokesman Valter Zrinski told during a news conference on Monday.

The 21-year-old and her accomplice — a 29-year-old member of her family — have been detained and face up to eight years in prison if found guilty.